Irda Pens Stern Code For Tpas

Third-party administrators (TPAs) have been barred from advertising products without the consent of insurance companies whom they deal with. At the same time the TPA regulations put out by the Insurance Regulatory and Development Authority (Irda) has called for strict confidentiality in the information shared with insurance companies.

The need for a stringent code of conduct comes in the wake of the regulator allowing TPAs to tie up with more than one insurer in a bid to expand the health insurance market. The stiff conditions on data confidentiality make it imperative for TPAs to maintain records, documents and evidences and books of all transactions for at least a period of three years.

 

The regulations press for clarity in agreement signed between the insurance company and the TPA with regards to the scope of the contract and the facilities that the administrator has to provide, as well as the commission rates. Irda has further stated that TPAs should refrain from demanding or receiving a share of the proceeds or indemnity from the claimant under an insurance contract. TPAs are also barred from charging any separate fees to policyholders. At the same time, no specification on the possible commission rates has been given by the regulator, even as TPAs have been restricted in their business activity, limited solely to the health insurance sector.